06:26 AM EDT, 04/04/2024 (MT Newswires) -- Levi Strauss (LEVI) shares advanced early Thursday after recording better-than-expected fiscal first-quarter results, buoyed by growth across all direct-to-consumer segments, prompting the apparel company to lift its full-year earnings outlook.

Adjusted earnings are now set to come in between $1.17 and $1.27 a share for fiscal 2024, up from its previous guidance for $1.15 to $1.25, the company said late Wednesday. The consensus on Capital IQ is for normalized EPS of $1.24. The company continues to anticipate annual revenue growth of 1% to 3%.

"The structural economics of our business improved in (the first quarter) driven by significant gross margin expansion, disciplined expense controls and efficient working capital management," Chief Financial Officer Harmit Singh said in a statement. "As a result, we are confident in our ability to return the topline to mid-single-digit growth in the second half of this year and are increasing our full-year EPS expectations."

Levi Strauss' shares have climbed 13% so far this year and gained 8.4% in premarket trading.

For the three-month period ended Feb. 25, adjusted EPS declined to $0.26 from $0.34 the year before, but topped the Street's view for $0.21. Revenue fell 8% to $1.56 billion, but was slightly ahead of analysts' $1.55 billion estimate.

The direct-to-consumer channel saw sales increase by 7%, with a 10% jump in the US while e-commerce inclined 13%. Wholesale net revenue slumped 18%, weighed down by the pull-forward in shipments from the second quarter to the first quarter of 2023 due to the US enterprise resource planning implementation, which impacted overall revenue by about $100 million, according to the apparel maker.

Gross margin improved by 240 basis points to 58.2% during the quarter, aided by lower product costs and favorable mix shift. Selling, general and administrative expenses widened to $790.7 million from $773.5 million year-on-year.

In January, Levi Strauss disclosed a multi-year global productivity initiative aimed to save $100 million in costs this year. The first phase of the program is expected to occur in the first half and involve the reduction of 10% to 15% of the company's global workforce. "Our efforts to stabilize our wholesale business are delivering results," Chief Executive Michelle Gass said in the earnings statement.

For the ongoing quarter, Levi Strauss continues to expect revenue to be up in the "high-single-digits," reflecting the shift in the enterprise resource planning implementation and the exit of the Denizen business, Singh said during an earnings call, according to a Capital IQ transcript. The company also forecasts adjusted EPS of $0.10, while the Street is looking for $0.11.

Price: 20.22, Change: +1.56, Percent Change: +8.36